Bank of America

Possible Civil Rights Violation

International Ukrainian passport with US dollars isolated on gray background

Why is Bank of America forcing customers to verify their citizenship status?

Because of the rules of Fair Lending Practices, proof of citizenship is not required to open an account or conduct business with a bank in the United States. But that hasn’t stopped Bank of America from allegedly freezing customers’ accounts or making it difficult to use the account. Stories of people who refuse to confirm to B of A whether they are U.S. citizens are starting to surface.

Recently, Bank of America froze the accounts of a married couple in Kansas and a man in Georgia because they failed to respond to Bank of America’s request for citizenship information. These customers were U.S. citizens, but their experiences may serve as a warning to immigrants who rely on Bank of America products to support their families.

Now more than ever, immigrants need access to banking products and services that can help them prepare for and survive in these difficult times. By allegedly requiring customers to verify citizenship status, Bank of America is restricting access and making it even harder for immigrants to save money and participate in helping to build the US economy.

Unsolicited reports began finding their way to online forums and local news, beginning last year. From Kansas City to Washington to New York, the stories all followed the same pattern: Bank of America sent a customer a notice demanding details about their citizenship, and if they refused to answer, their accounts were promptly frozen.

Aimed at combating tax evasion, outside the United States, this is a normal practice. But here in the US, these reports have raised fears that banks could help authorities identify and target immigrants. In the UK the banking industry has already been charged with collecting information on foreigners as part of a bigger plan to create a “hostile environment” for undocumented immigrants. Immigrants and advocates worry the United States could be next.

But domestically, they are not required to collect customer citizenship information. In fact, Social Security numbers aren’t even required to open an account. Shortly after Donald Trump’s election, in December 2016, a senior counsel for the American Bankers Association said that “banks don’t track whether or not someone is legally in the U.S.”

In the United States immigrants make up a significant share of potential borrowers and account-holders. There are more than 14 million permanent residents with green cards, 2 million workers in the country on visas, and an estimated 11 million residents who are undocumented.

But immigrants are not a protected class under fair-lending laws, and face legal discrimination from financial institutions. While institutions cannot discriminate based on “national origin,” they are free to discriminate based on immigration status. Asking for a customer’s citizenship helps them do that.

Currently, non-citizens are able to access traditional loans only at the discretion of individual lenders, some of which advertise special advisers and products for immigrant customers, and some of which deny certain services to certain classes of immigrants.

Still, by the numbers, immigrants prove to be good bank customers. Since receiving Social Security numbers, tens of thousands of DACA recipients have taken out student loans and credit cards, and bought cars and homes—even though their mortgages can come with higher interest rates, as they’re harder to sell on the secondary-debt market. There’s little data available specific to noncitizen immigrant loans—but when immigrants are able to become citizens, homeownership rates jump.

Some of the underbanked avoid traditional financial institutions because of a lack of trust. They aren’t necessarily forced into the more expensive alternative financial-services market—they often just feel it’s their best, safest option.